No VHI cover puts private hospital in jeopardy

A NEW private hospital planned for Cork city looks set to follow the same fate as its doomed predecessor following a VHI decision not to provide cover for its customers at the facility.

The Mater Private had planned to take over what was formerly the Cork Medical Centre (CMC) and re-open its doors by the end of the year.

However, VHI has now written to Fergus Clancy, chief executive of Mater Private Healthcare, confirming it will not be providing cover at the €75 million state-of-the-art facility at Citygate in Mahon.

The reason for the refusal is understood to be the same as that given by VHI to CMC — that it considers there is sufficient private bed capacity in the region.

CMC closed last March, less than six months after it opened, with the loss of 75 jobs and liabilities in excess of €5 million. The backers of CMC, Sheehan Medical, have said they intend to sue VHI.

The Mater Private, which announced its intention to take over CMC last July, felt it could overcome VHI’s reluctance to support the project on the basis that it would introduce new services to the region, including an integrated heart and vascular centre and radiotherapy treatment for private patients.

Mr Clancy had anticipated creating 250 jobs locally. A Mater Private spokesperson declined to comment last night. It is understood talks with VHI are ongoing.

Fine Gael senator Colm Burke has written to the Competition Authority challenging the VHI stance on the basis that the Cork hospital is the only new private facility refused cover by VHI in over a decade, and that others given cover were located in areas where private hospitals already existed, such as St Vincent’s Private Hospital in Dublin.

In addition, Mr Burke argues that VHI is effectively denying its competitors — Quinn Healthcare and Aviva, both of whom are prepared to provide cover at the hospital — the right to exercise their own commercial decisions as a result of its decision. This is because VHI is the dominant market player and the hospital could not survive without it.

Last night, Mr Burke said the Competition Authority was studying the matter.

Fine Gael TD, Jerry Buttimer, who was party to the letter to the Competition Authority, said he would be calling on VHI to explain its refusal.

Both Mr Buttimer and Mr Burke questioned whether VHI had a “de facto exclusive arrangement” with the private Bon Secours Hospital in Cork city, which is pressing ahead with plans for an €80 million expansion.

Mr Clancy is expected to brief Oireachtas members on the developments at a meeting in Buswell’s Hotel in Dublin this morning.

VHI failed to return calls made by this newspaper last night.